Inherited IRA Rules: The 10-Year Withdrawal Trap
Who has to follow which rule
| Beneficiary type | Withdrawal rule |
|---|---|
| Surviving spouse | Can treat the IRA as their own or stay a beneficiary, and may stretch withdrawals over their own life expectancy. Not subject to the 10-year rule. |
| Eligible designated beneficiary (minor child of owner, disabled/chronically ill, or heir not more than 10 years younger) | Exempt from the 10-year rule. May still stretch withdrawals over life expectancy. |
| Most non-spouse heirs (adult children, grandchildren, other relatives, friends) | Must empty the account by year 10. If the owner had already started RMDs, must also take annual withdrawals in years 1 to 9. |
Rules are general and depend on the owner's date of death, their RMD status, and the beneficiary's category. Confirm your specific situation before acting.
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Why lump-summing in year 10 is often the worst move
It's tempting to leave the money untouched and pull it all out at the deadline. The problem: every dollar of a traditional inherited IRA is taxed as ordinary income in the year you withdraw it. Cramming ten years of withdrawals into one tax year can push a heir from the 22% bracket into the 32% or 35% bracket, trigger higher Medicare (IRMAA) premiums, and phase out other tax benefits. Spreading roughly equal withdrawals across all ten years keeps each year's income lower and usually results in a smaller total tax bill over the decade.
Coordinating with the heir's own income
The "right" pace isn't purely mathematical. It depends on what else is on your tax return. An heir who is still working in their peak earning years may want to take smaller withdrawals now and larger ones after they retire into a lower bracket. An heir already retired might front-load withdrawals in low-income years before Social Security and their own RMDs begin. The goal is to fill up the lower tax brackets each year without spilling into a higher one, all while still emptying the account by the deadline.
What the 10-year rule costs you
Two inputs. It compares spreading withdrawals evenly against waiting until year ten, which is the mistake that costs the most.
| Your income while spreading | $0 |
| Your income if you wait for year 10 | $0 |
| Top bracket you would hit by spreading it out | n/a |
| Top bracket you would hit by waiting | n/a |
We will email you a written breakdown showing what to withdraw each year, when the annual requirement applies, and how to use your lower-income years. Free, and yours to forward to whoever does your taxes.
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These numbers change every year
The IRMAA brackets, the standard deduction and the senior deduction are all adjusted annually, and the 2027 figures are published late in 2026. The one exception is the Social Security taxation thresholds, which have not moved since 1983 and are not expected to.
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See your inherited IRA drawdown, year by year
Enter the balance, your other income, and your timeline. Our free calculator shows the withdrawal schedule that spreads the tax hit and keeps you on pace for the 10-year deadline.
Plan my inherited IRA →Frequently asked questions
What is the inherited IRA 10-year rule?
Under the SECURE Act, most non-spouse heirs must withdraw the entire inherited IRA by December 31 of the 10th year after the owner's death. The old lifetime "stretch IRA" that let heirs spread withdrawals over their own life expectancy no longer applies to most beneficiaries.
Do I have to take annual withdrawals during the 10 years?
It depends on the owner's RMD status. If the original owner had already started required minimum distributions before death, most non-spouse heirs must take annual withdrawals in years 1 to 9 and empty the account by year 10. If the owner died before their RMD start age, no annual withdrawals are required, only the full balance by year 10.
Who is exempt from the 10-year rule?
Eligible designated beneficiaries can still stretch withdrawals over their life expectancy. This includes surviving spouses, minor children of the owner (until age 21, when the 10-year clock starts), disabled or chronically ill individuals, and beneficiaries not more than 10 years younger than the owner.
Want to run these numbers for your own situation?
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The Retirement Literacy Foundation is a 501(c)(3) non-profit. This guide is general financial education, not individualized investment, tax, or insurance advice. Rules are illustrative and change with legislation and IRS guidance, and depend on your personal situation. Consider speaking with a licensed professional before making decisions.
Hans Goldstein
Founder & Executive Director · Retirement Literacy Foundation, a 501(c)(3) non-profit
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